US bank supervisors contacted banks after last week's $6.3 billion hack of Binance, asking about unusual activity or service disruptions. Banks are also running diagnostics on their own systems. Regulators are alert to the risk that a crypto hack could spill into traditional finance.
US regulators contacted banks to check for vulnerabilities after last week's $6.3 billion hack of Binance. According to Reuters, they are alert to the risk that a crypto hack could affect traditional finance at a time when links have tightened.
Fed and OCC supervisors start outreach on Monday
Supervisors from the Federal Reserve and the Office of the Comptroller of the Currency started reaching out on Monday morning, according to several sources familiar with the matter. They asked banks about any unusual activity or disruption in their services. The Fed and OCC declined comment.
One source at a contacted bank said there were no disruptions in its services. Employees there prepared talking points for customers but have since received few inquiries.
Banks review their own defenses
Banks have been studying the hack, believed to be the largest financial heist in history. According to two separate people familiar with the efforts, they are also running diagnostics to prepare for a similar attack.
Within hours of the attack, a cybersecurity team at one of the largest US banks reached out to counterparts at Binance, according to one of the sources. The team is working on an internal report that will lead to a review of the bank's systems. It was not yet clear whether the bank would be vulnerable to similar tactics.
Binance said it was unaware of conversations between bankers and regulators, and of whether the hack affected US banks. A spokesperson said: "We are in close contact with regulators all over the world", according to Reuters.
Crypto ties to banks have grown
One person familiar with the matter said the big concern is that artificial intelligence models have been evolving quickly, making it a challenge for banks to keep up with hackers.
Meanwhile, US bank regulators have smoothed the way for banks to get more active in cryptocurrency markets. The Federal Reserve revoked a 2022 rule that advised banks to get permission from regulators before launching any crypto-related activities.
Source: Reuters via Investing.com
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